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Thanksgiving week ushers in the holiday season for Americans. It also kicks off a seasonal bullish bonanza for investors who look to historical probabilities before stuffing their portfolios.
Looking through the history books, Wednesdays just prior to T-day have delivered the best historical gains of the week. By far.
Thanksgiving week seasonality for stocks
According to Yahoo Finance data and calculations, the S&P 500 has ended the week green three-quarters of the time going back to 1961 — with an average and median gain of 0.3%. For the entire week, the S&P 500 has been positive two-thirds of the time, allowing investors to harvest a median gain of 0.75%.
In the midst of the Global Financial Crisis, 2008 was the best year for Thanksgiving week — with the S&P 500 posting a gain of 12.0%. The worst year was three years later in 2011, which suffered a 4.7% loss.
Jeff Hirsch at the Stock Trader’s Almanac first noticed the seasonal turkey-day tendency in 1987. Since then, the week’s pattern has become a bit less bullish — particularly on Wednesdays and Fridays. That’s because, incredibly, both of those two weekdays were green in 34 of the 35 years prior to 1987.
Nonetheless, if an investor bought the S&P 500 the Friday before Thanksgiving and sold it the Friday after beginning in 1961, they’d be up 42% as of last year — a compounded annual growth rate of 6.2%, according to Yahoo Finance data.
It might not be better than being invested continuously, but not bad for only a few days of exposure a year.
A turkey ponders an investment in Tesla stock. This image was created by Yahoo Finance using the Midjourney site and platform.
When it comes to sectors, energy has fared the best — posting median gains of 1.5% with a 74% win rate since 1999. Close behind, the sectors for materials, tech, consumer discretionary, and communication services have all allowed investors to gobble up median gains of 1.0% or more.
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Financials have fared the…
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